Bank of Ireland Home Mortgages Ltd v Bell
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,SIR CHRISTOPHER STAUGHTON |
| Judgment Date | 04 December 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J1204-1 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B3/2000/3182 |
| Date | 04 December 2000 |
[2000] EWCA Civ J1204-1
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LAMBETH COUNTY COURT
(His Honour Judge Cox)
Royal Courts of Justice
Strand
London WC2
Before: Lord Justice Peter Gibson
Sir Christopher Staughton
B3/2000/3182
B3/2000/0090
MR HUGH JACKSON (Instructed by Messrs Eversheds, Bristol BS1 4NT) appeared on behalf of the Appellant
MR ANDREW DE LA ROSA (Instructed by Messrs Rippon Patel & French, London W1N 1DB) appeared on behalf of the Respondent
The claimant, Bank of Ireland Home Mortgages Limited ("the bank"), appeals with the leave of the single Lord Justice from the order of His Honour Judge Cox in the Lambeth County Court on 30th April 1999. By that order the judge allowed the appeal of the second defendant, Mrs Emilia Bell, from the order dated 8th September 1992 of the District Judge. The District Judge had granted the bank, as the registered holder of a legal charge dated 17th November 1988 over Flat 21, Horselydown Court, Horselydown Lane, London SE1 ("the property"), an order for possession against the first defendant, Edward Bell, and his wife, Mrs Bell. Leave to appeal against the District Judge's order was given on 4th March 1993, but regrettably it was another six years before the appeal was heard by the judge.
The judge ordered rectification of the Charges Register in respect of the title to the property to delete the charge on the property in favour of the bank. He declared that the bank was entitled to an equitable charge binding on Mr and Mrs Bell over the property in the sum lent by the bank in relation to the acquisition of the property by Mr and Mrs Bell and interest on that sum, but refused to order the sale of the property. The judge ordered the bank to pay Mrs Bell's costs of the action.
The facts can be summarised in this way. Mrs Bell is Bulgarian by origin. She married Mr Bell in 1979. They have one child, a son, who was born on 27th August 1981. They lived abroad for some time, but in 1986 Mrs Bell joined her husband in England. They lived first in Luton and then in Bromley in a flat belonging to Mr Bell alone. While they were living in Bromley Mr Bell decided to sell the Bromley flat and to purchase the property. Contracts for the purchase of the property at £189,000 were exchanged on 27th May 1987 at a time when the property was in the course of construction. The judge found that there was some discussion between the Bells about this purchase over the telephone when Mrs Bell was on one of her frequent trips to Bulgaria (where she earned much of her living as a technical translator), that in that conversation she gathered from Mr Bell that about £150,000 would have to be borrowed for the purchase, and that repayments would cost about £1,500 per month. Mrs Bell's evidence was that she was shocked at this news.
An application dated 9th July 1998 for a mortgage was submitted to the bank. The judge described it as "apparently signed" by Mr and Mrs Bell. Three mortgage offers were in fact made by the bank: the first on 21st September 1988 of £150,481, which does not appear to have been accepted; the second on 28th September 1988 of the same amount and expressed to replace the first offer, which the judge found was returned "apparently signed" by both Mr and Mrs Bell on 6th October 1988; and the third dated 15th November 1988 of £150,770 which the judge said "appears to have been signed by both of them on 19th November 1988, two days after completion and purported execution of the charge." Again the offer was expressed to replace the previous offer, in this case the offer of 28th September 1988. The judge also mentioned that in connection with the mortgage application a letter was written on 12th October 1988 in which were found what the judge called "the purported signatures of both applicants". In that letter confirmation was given that there were no other mortgages to which either of them was a party.
On 17th November 1988 the sale of the property, in the form of a long lease to Mr and Mrs Bell jointly, was completed and the charge over the property, as well as a further charge over a life policy, were purportedly executed by Mr and Mrs Bell. In 1989 an application was made to the bank to reschedule the payments due under the charge, and agreement was reached on this by a letter of acceptance, again purportedly from Mr and Mrs Bell, dated 26th July 1989. On 14th May 1990 a second charge was granted over the property in favour of Lloyds Bank, again it would appear in the names of Mr and Mrs Bell.
By 1991 arrears under the charge were mounting. The property was for a short time the matrimonial home of the Bells, living there with their son. But in early 1991 Mr Bell left to work in Czechoslovakia and never returned. Mrs Bell claimed that until December 1991 she sent Mr Bell money which she had saved. He said he would deal with the mortgage arrears.
On 1st May 1992 the bank gave formal notice of default. The arrears then were about £10,000. The bank commenced possession proceedings on 9th June 1992 against Mr and Mrs Bell. On 8th September 1992 the District Judge, at a hearing attended by Mrs Bell in person, made an order for possession. Belatedly, Mrs Bell then obtained legal advice and on 2nd March 1993 leave to appeal out of time was granted to her. A defence to the bank's claim was filed in which she denied knowledge of the charge or being a party to the charge. She counterclaimed for a declaration that her interest in the property was not subject to the charge. Mr Bell did not seek to defend the proceedings.
It is not clear why the case took so long to come to trial. On 23rd June 1998 there was a directions hearing before the judge who ordered the exchange of expert evidence within 21 days. Mrs Bell served the report of a handwriting expert in support of her claim that her signature had been forged. The bank did not serve any expert evidence, even though it now appears that it had a report from an expert in March 1998. The bank's solicitors in July 1988 told Mrs Bell that the bank was not going to adduce its own expert evidence. The case was set down for trial in November 1998. Mrs Bell sought an adjournment on the ground of her ill health. The bank opposed the application. But the adjournment was granted until February 1999.
On 9th December 1998 the bank sought permission to adduce its expert's report out of time. The judge on 13th January 1999 refused that application. There was no appeal before the trial, and at the trial the bank did not challenge the expert evidence put in on behalf of Mrs Bell.
At the trial the judge heard evidence from a number of witnesses, including Mrs Bell. The judge referred to the fact that in answer to interrogatories she said on oath that on 21st February 1994 that the signature on the acceptance of the second offer was hers. He said in his judgment that Mrs Bell had resiled from this in her oral evidence, saying that she did not recollect signing it. The judge said this of her:
"I am bound to say that I did not find the evidence of Mrs Bell to be very satisfactory. She was a poor witness, much given to making bold assertions from which she was later forced to resile. Until trial she was adamant that she could not have signed certain of the documents because she was out of the country at the material times. In the course of her evidence she was forced to concede that this assertion was based on a misunderstanding of entries in her Bulgarian passport and that entries which she had construed as meaning that she had entered Bulgaria on particular dates in fact recorded that she had left that country on those dates. She then sought to explain the evidence by saying that she would not have left to return to England but rather to travel elsewhere in Europe. The dates of her entry into the UK would have been recorded in her British passport but this has never been disclosed.
With that important caveat, I must look at the totality of her evidence, the overall impression I have of her and what I believe to be the realities of the situation. I accept that the concept of a mortgage in the sense that it was a charge on the property was completely alien to her. Her husband had turned his hand to many things but at the material time he was known by her to be in financially related business. She told me, and I accept from her that his was the guiding hand in financial transactions affecting both of them and that it was not unusual for him to present documents to her for signature without explanation. Granted that it is known that her signature was forged on two material documents I find it impossible to conclude that her evidence as to the signing of other documents is to be rejected. Telling as cross examination may have been, I do not think that I am justified in reaching the conclusion that she has been trying to pull the wool over my eyes. I accept that while she knew that monies would have to be borrowed to finance the purchase she had no idea of the real nature of the transaction and I think that that conclusion is reinforced by her reaction to the original possession order on the making of which she moved out of the property."
The judge then rejected a submission that Mrs Bell assented to the charge and held that the charge was a nullity in its entirety, though operating as an equitable charge over Mr Bell's interest in the property. The judge considered next whether the Register of Charges should be rectified. He referred to a number of the bank's...
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